UPDATED: Sony to profit off of the Xbox 360 with Blu-ray?

Just before GDC last month, Sony came through with an illustrious victory as Blu-ray became the winner of the HD format war. This resulted in an extra ray of light over the PlayStation 3 console which supports the Blu-ray format right out of the box. With its competition not having any physical HD format support out of the box, this has given the PS3 a clear advantage. All of that could change as Sony and rival Microsoft, has entered talks regarding their console supporting Blu-ray.

Stan Glasgow, Sony Electronics US president has confirmed that both Sony and Microsoft have entered negotiations that would allow Microsoft to implement the Blu-ray format into the Xbox 360 gaming console. Many would consider this business decision suicide, as this would take away from the considerable advantage that the PS3 has over the 360, however, Sony would gobble up extra revenue through this deal as compensation to the Sony Electronic's division. The options that Microsoft has are varied. They could introduce a new SKU that supports Blu-ray built in with a more expensive price point or create yet another add-on similar to the HD-DVD one currently available. Either way, Sony would collect compensation on every unit sold whether it is an add-on or a full unit with the format built in.

We can now reveal to you that Microsoft is indeed working with Sony to allow the Xbox 360 to become Blu-ray accessible. Speaking yesterday in Las Vegas, Steve Balmer, the CEO of Microsoft had this to say:

"We've already been working on, for example, in Windows, device driver support for Blu-ray drives and the like, and I think the world moves on. Toshiba has moved on. We've moved on, and we'll support Blu-ray in ways that make sense."

Did Mr. Balmer go too far and reveal something that Microsoft was not ready to let loose? All we know is that the Xbox 360 will in some way or form be allowed to play Blu-ray movies. This will seriously affect the sales of both sides as Microsoft can now say that the 360 can also play Blu-ray movies while the PS3 loses its advantage of being the only console to offer Blu-ray support. However, Sony will also gain extra revenue through this. So it is a win/lose situation for Sony and one we will closely have an eye on.

It looks like the days of the PlayStation 3 being the only Blu-ray+Game console is starting to come to an end.